LOUISVILLE, Ky. & SHANGHAI--(BUSINESS WIRE)--Yum! Brands, Inc. (NYSE: YUM) today announced that it has entered into
agreements with Primavera Capital Group, a China-based global private
equity firm, and Ant Financial Services Group, one of the world’s
leading online and mobile financial services providers that operates the
widely used Alipay mobile payments platform, to invest a total of $460
million in Yum China, concurrent with the completion of Yum China’s
spinoff from Yum! Brands.

The spinoff and concurrent completion of the Primavera and Ant Financial
investments are expected to occur on October 31, 2016, with Yum China to
commence trading on the New York Stock Exchange as an independent
company on November 1, 2016, under the ticker symbol “YUMC.”

Under the terms of the agreements, Primavera and Ant Financial will
invest $410 million and $50 million, respectively, in Yum China. The
final number of shares issued to Primavera and Ant Financial will be
subject to a post closing adjustment such that the effective price will
be equal to an 8% discount to the volume-weighted average trading price
of Yum China’s equity value during the period commencing 31 days and
ending 60 days following completion of the spinoff (subject to a collar
mechanism limiting the minimum and maximum shares to be issued).
Primavera and Ant Financial will also receive two tranches of warrants
to acquire shares of Yum China common stock reflecting approximately 2%
equity ownership interest (in the aggregate) in each tranche to be
exercisable in the five-year period following the issuance of those
warrants, with strike prices correlating to equity values of $12 billion
and $15 billion.

The Company also announced that founder of Primavera Dr. Fred Hu, former
Chairman of Greater China at Goldman Sachs, will become Non-Executive
Chairman of the Board of Yum China.

“We have long admired the Yum China business and are looking forward to
collaborating with the Board and management to realize the company’s
full potential,” said Dr. Hu of Primavera. “Yum China is an established
leader in the retail and restaurant industry which we believe is poised
for continued strong growth and unit expansion as cities across China
invest in new transportation hubs, shopping malls and other physical and
electronic infrastructure that will support consumption. I look forward
to leading the Board of Directors of Yum China in its new and exciting
chapter as an independent company.”

“Through this collaboration, we aim to help Yum China provide
world-class mobile payment services for tens of millions of customers
across its brands. These services include hassle-free Alipay for
customers to help shorten queues at the cashier as well as membership
solutions for Yum China designed to help manage their customer relations
and promotions,” said Eric Jing, President of Ant Financial Services
Group. “Leveraging our Big Data capabilities, KFC and Pizza Hut
witnessed promising marketing results through their promotion on
multiple Ant Financial platforms. We look forward to further
collaborating with Yum China in the future.”

“Primavera and Ant Financial both have deep insights into the rapid
urbanization and digital transformation which is driving the evolution
of China’s economy, and we are excited about their investment into Yum
China,” said Micky Pant, Chief Executive Officer of Yum China. “The
investment is a clear endorsement of our business strategy and growth
potential, and their diverse experience and relationships will be
extremely beneficial. Dr. Hu’s extensive market insights and experience
scaling businesses in China will be invaluable as we move to expand the
footprint of our brands. In addition, Yum China is already the leading
restaurant company for cashless payment systems in China, and we expect
Ant Financial can provide further unique insights to help us better
connect with consumers through mobile technology.”

“The investments from Primavera and Ant Financial in Yum China mark
another important milestone in our plans to separate the China business
and create a solid foundation for Yum China as it prepares to become an
independent restaurant powerhouse,” said Greg Creed, Chief Executive
Officer of Yum! Brands. “We look forward to partnering with Primavera
and Ant Financial to drive long-term growth at Yum China and welcome Dr.
Hu as Non-Executive Chairman of Yum China. I’m pleased that the spinoff
remains on track for completion on October 31 and look forward to
sharing additional details on the transformative initiatives we are
undertaking as we become a more heavily franchised company at our New
York investor conference on Tuesday, October 11.”

Primavera has an established track record of supporting successful,
high-growth companies in China whose business models benefit from rising
consumption and the adoption of urban lifestyles. Its investments
include Alibaba Group Holding Ltd. (NYSE: BABA) and Ant Financial, among
many others. Ant Financial is an online and mobile financial services
firm and digital payments network provider in China.

The closing of the investments are subject to completion of the spinoff
and other customary closing conditions.

Yum China Holdings will become a licensee of Yum! Brands in Mainland
China. It will have exclusive rights to KFC, China’s leading
quick-service restaurant concept, Pizza Hut, the leading casual dining
brand, and Taco Bell, which is expanding globally but is not yet in
China. The new company will be well positioned for growth thanks to its
strong financial position, established brand identity, extensive and
expanding footprint and operational expertise. It will have a strong
capital position, no debt and significant sales and profit potential
from its existing restaurants. KFC and Pizza Hut have more than 7,200
restaurants in over 1,000 cities in China and generated over $8 billion
in system sales and approximately $1 billion in EBITDA in 2015. The
growth of consumption in China is being fueled by a new generation of
younger consumers who are digitally sophisticated and brand driven. The
additional growth of the urban population in China is expected to create
the world’s largest market for restaurant brands, with Yum China as the
clear leader.

About Yum! Brands

Yum! Brands, Inc., based in Louisville, Kentucky, has nearly 43,000
restaurants in almost 140 countries and territories. Yum! is ranked #218
on the Fortune 500 List with revenues of over $13 billion in 2015 and is
one of the Aon Hewitt Top Companies for Leaders in North America. The
Company’s restaurant brands - KFC, Pizza Hut and Taco Bell - are the
global leaders of the chicken, pizza and Mexican-style food categories.
Worldwide, the Yum! Brands system opens over six new restaurants per day
on average, making it a leader in global retail development.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication contain “forward-looking
statements.” Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. These
statements often include words such as “may,” “will,” “estimate,”
“intend,” “seek,” “expect,” “project,” “anticipate,” “believe,” “plan,”
“could,” “target,” “predict,” “likely,” “should,” “forecast,” “outlook,”
“model,” “ongoing” or other similar terminology. Forward-looking
statements are based on our current expectations, estimates, assumptions
or projections concerning future results or events, including, without
limitation, the planned Separation of the Yum and Yum China businesses,
the timing of any such Separation, the Investment, the closing of the
Investment, or the future earnings and performance as well as capital
structure of Yum or any of its businesses, including the Yum and Yum
China businesses on a standalone basis if the Separation is completed.
Forward-looking statements are neither predictions nor guarantees of
future events, circumstances or performance and are inherently subject
to known and unknown risks, uncertainties and assumptions that could
cause our actual results to differ materially from those indicated by
those statements. We cannot assure you that any of our expectations,
estimates or projections will be achieved. Factors that could cause
actual results and events to differ materially from our expectations and
forward-looking statements are included in reports filed with the SEC by
Yum from time to time, including those discussed under the heading “Risk
Factors” in our most recently filed reports on Form 10-K and 10-Q. You
should not place undue reliance on forward-looking statements, which
speak only as of the date hereof. We are not undertaking to update any
of these statements.